Wheel Specialties, Ltd. v. Starr Wheel Group, Inc.

918 F. Supp. 2d 688, 2013 WL 179465, 2013 U.S. Dist. LEXIS 6511
CourtDistrict Court, N.D. Ohio
DecidedJanuary 16, 2013
DocketCase No. 4:10cv2460
StatusPublished
Cited by1 cases

This text of 918 F. Supp. 2d 688 (Wheel Specialties, Ltd. v. Starr Wheel Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wheel Specialties, Ltd. v. Starr Wheel Group, Inc., 918 F. Supp. 2d 688, 2013 WL 179465, 2013 U.S. Dist. LEXIS 6511 (N.D. Ohio 2013).

Opinion

OPINION AND ORDER

CHRISTOPHER A. BOYKO, District Judge.

This matter is before the Court on Defendant’s Motion for Summary Judgment (ECF # 62) and Plaintiff’s Motion for Partial Summary Judgment (ECF # 65). For the following reasons, the Court denies Defendant’s Motion and grants, in part, Plaintiff’s Motion.

According to Plaintiff’s Verified Complaint, Plaintiff Wheel Specialties, Ltd. (“Custom Wheels”) is a designer, distributor and seller of custom-tailored automobile aftermarket wheels. Custom Wheels sells its wheels under several trademarks and has spent considerable resources developing goodwill in its products and marks. Custom Wheels has advertised and sold its wheels under several trademarks, including: MIROR ALLOYS®, ROX®, BIGG WHEELS®, MEZZANO ALLOYS®, and RADD®.

Sometime in 2004, Custom Wheels entered into an agreement with Defendant Ningbo Baody Auto Parts Co., Ltd., (“Baody”), a Chinese company, to manufacture wheels for Custom Wheels. The agreement required Baody to manufacture certain unique styles and types of wheels containing Custom Wheels’ trademarks exclusively for Custom Wheels. Baody agreed not to sell the wheels to any of Custom Wheels’ competitors or third parties. Custom Wheels contends that in April 2008 Baody supplied Custom Wheels with defective wheels in breach of their contract. Furthermore, Custom Wheels discovered Baody was selling to Custom Wheels’ competitors the styles and types of wheels that, under the agreement, were intended exclusively for Custom Wheels. Custom Wheels then filed suit in the case captioned Wheels Specialties, Ltd. v. Ningbo Baody Auto Parts Co., Ltd., Case No. 1:09CV 2669 (the first suit), alleging claims for breach of contract, breach of warranties and covenants, fraud, estoppel and for accounting. As a result of the suit, the parties signed a Settlement Agreement on February 22, 2010, which contained mutual releases and a covenant not to sue.

In March of 2010, Starr Wheel Group, Inc. (“Starr”) emailed prospective customers that it had acquired eighty-five hundred wheels for sale at a discounted price. The acquired wheels included wheels bearing the trademarks of Custom Wheels. The email represented that the newly acquired wheels were liquidated stock shipped from China. The packing list for a shipment of wheels shows they shipped from Baody to Starr on April 4, 2010. Both Starr and Warrior Imports, Inc. (“Warrior”) sold Custom Wheels’ trademarked wheels.

On June 28, 2010, Custom Wheels filed suit against Baody. On October 28, 2010, the Court dismissed the suit without prejudice for procedural reasons. That same day, Plaintiff filed this suit asserting [691]*691claims against Baody, Starr and Warrior for trademark infringement, trademark counterfeiting, violation of the Lanham Act, violation of Ohio Deceptive Trade Practices Act and a claim for defamation against Baody alone. On January 19, 2012, 2012 WL 160203, the Court granted Baody’s Motion for Judgment on the Pleadings, dismissing all Plaintiffs claims against it and denied Starr and Warrior’s Motion for Judgment on the Pleadings. Custom Wheels has now moved for Partial Summary Judgment on its trademark infringement and trademark counterfeiting claims against Starr and Warrior. Starr moves for Summary Judgment on all Custom Wheels’ claims. Warrior does not move and has not opposed Custom Wheels’ Motion.

Defendant Starr’s Motion

Starr contends Plaintiff cannot maintain a cause of action for trademark infringement and unfair competition because none of the wheels sold by Starr Wheels were counterfeits, reproductions, copies or imitations of Custom Wheels’ wheels. Instead, they were the actual wheels produced by Baody for Custom Wheels. Nor has Custom Wheels suffered any damage as a result of Starr’s sales of Custom Wheels’ wheels. Custom Wheels’ 30(b) witness was unable to identify any damages as a result of Starr’s purchase of Custom Wheels’ trademarked goods.

Starr also contends Plaintiff cannot maintain a claim for trademark counterfeiting because Starr never knowingly used Plaintiffs trademarked wheels. Once Starr learned that the wheels it purchased from Baody were trademarked, Starr took steps to ensure it did not sell any trademarked wheels. Because Starr relied on representations by Baody that Custom Wheels was no longer in business, Starr argues it cannot be liable for knowingly using counterfeit trademarked goods since Custom Wheels cannot prove intent.

Starr further contends Plaintiff can produce no evidence to support its claim of a deceptive act by Starr that supports Plaintiffs Ohio Deceptive Trade Practices claim. Starr argues there is no evidence of customer confusion or misunderstanding. Nor is there any evidence that Plaintiff lost sales or market share as a result of Starr’s purchase from Baody. Furthermore, Plaintiff cannot show Starr even knew it was selling Plaintiffs goods.

Custom Wheels opposes Starr’s Motion for Summary Judgment, contending that Starr sold wheels bearing marks identical to Custom Wheels’ trademarks. Starr never inquired further into Baody’s representation that Custom Wheels was out of business but remained willfully blind to the status of Custom Wheels. Starr admittedly sold wheels bearing Custom Wheels’ marks to customers at a lower rate than authentic Custom Wheels’ wheels. Custom Wheels has lost sales and image and goodwill because Custom Wheels did not have the opportunity to approve the quality of the wheels bearing its marks.

Custom Wheels contends that it never authorized Starr to sell Custom Wheels’ trademarked wheels. Furthermore, Custom Wheels rejected the wheels Starr purchased from Baody and never authorized Baody to continue producing nonconforming wheels bearing Custom’s trademarks. On this basis, the wheels sold by Starr and bearing Plaintiffs trademarks are not “authentic” and are, therefore, counterfeit goods.

Plaintiff’s Motion for Partial Summary Judgment

Plaintiff moves for Partial Summary Judgment on its federal claims for trademark infringement and trademark counterfeiting. According to Custom Wheels, Starr sold wheels bearing Custom Wheels trademarks, marketed the Wheels as authentic Custom Wheels’ wheels and sold [692]*692them at a lower price than authentic Custom Wheels. Custom Wheels contends Starr never inquired whether the wheels were authentic and Custom Wheels never authorized Starr to sell the wheels.

LAW AND ANALYSIS

Summary Judgment Standard

Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); accord Int’l Union v. Cummins, Inc., 434 F.3d 478, 483 (6th Cir.2006); Turner v. City of Taylor, 412 F.3d 629, 637 (6th Cir.2005). The initial burden to demonstrate the absence of a genuine issue of material fact rests with the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant makes a properly supported motion, the burden shifts to the nonmoving party to demonstrate the existence of a genuine dispute.

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918 F. Supp. 2d 688, 2013 WL 179465, 2013 U.S. Dist. LEXIS 6511, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wheel-specialties-ltd-v-starr-wheel-group-inc-ohnd-2013.